Canada: Cold Shoulder: BC Court Denies Certification Finding No "Identifiable Class"

A recent decision by the British Columbia Supreme Court denying class certification illustrates the Court's continued insistence on the rigorous application of the statutory certification criteria, most notably the "identifiable class" requirement. On November 16, 2016, the Court denied certification of a proposed class action related to alleged misrepresentations in the labeling and packaging of Cold-Fx. Justice Dillon held that the class action failed to meet identifiable class requirement because there was no way to objectively determine the class members, and the class definition was deemed to be overinclusive. Moreover, the Court concluded that the asserted claims did not raise common issues, and there was no appropriate representative plaintiff.

Background

In Harrison v. Afexa Life Sciences Inc., the plaintiff alleged that the labelling, packaging, and marketing of  Cold-Fx misled purchasers that the product provided "immediate relief" of cold and flu symptoms. The defendants argued the products were marketed as preventative immune system boosters, not after-the-fact remedies. Many of the plaintiff's claims were previously abandoned or struck out for failing to disclose a cause of action. At certification, the remaining causes of action consisted of various common law claims, including fraud, deceit, misrepresentation, unjust enrichment and waiver of tort, as well as alleged breaches of the Competition Act.

The Decision

The Court denied certification in part because the proposed class was overly broad. Following recent case law in B.C., Justice Dillon held that the class definition included persons with no claim and therefore could not be certified. The proposed class included purchasers who did not buy the product for short term relief, who were not influenced by the representations, who were satisfied with the product and who purchased Cold-Fx products that did not contain the alleged misrepresentations.

The B.C. Supreme Court came to a similar conclusion in Clark v. Energy Brands Inc. where the court denied certification for claims related to alleged misrepresentations on the labelling and packaging of Vitamin Water beverages in part because the proposed class included purchasers who did not rely on the representations or who would have purchased the product in any event.

Justice Dillon also found that the plaintiff fatally failed to provide an objective means to determine whether an individual is a member of the class. Following the Supreme Court's decision in Sun-Rype, the Court emphasized the requirement that a particular person's claim be determinable by objective criteria. In Sun-Rype, the class action involved indirect purchasers who could not self-identify as purchasers of products that actually contained the sweetener at issue. The plaintiff offered no evidence to overcome the problem that there was no objective method for determining who was a class member. In the present case, the plaintiff failed to provide a means other than subjective examination to determine whether a person was a member of the class. There were many reasons for a person to purchase a Cold-Fx product and no way to objectively determine who purchased the product because of the representations.

Moreover, the Court found that the representative plaintiff could not fairly and adequately represent the class. The representative plaintiff was no more than a placeholder who appeared not to have been involved in the litigation since 2012 and the litigation plan was described as "outdated, boilerplate and rudimentary".

Future Implications

The identifiable class requirement continues to play a gate-keeping role for access to the class actions regime in B.C. This burden is particularly onerous in the context of misrepresentation claims, where plaintiffs must present an objective method for identifying class members who relied on the representation. Justice Dillon also recognized that while the Class Proceedings Act must be generously interpreted towards plaintiffs, it is "not intended to create complaints where none exist". Therefore, the Court will step in and deny certification if the representative plaintiff has no real interest in the litigation and is merely a placeholder advancing the entrepreneurial interests of lawyers.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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